Flood of Tech Earning Reports Point Upward For Smart Phones

The tech sector of the financial markets had a busy week with the release of earnings reports from giants including Amazon, Apple, AT&T, Microsoft, Nokia, Qualcomm, Verizon Wireless, and Yahoo–and not all of them were bad.

AMAZON: While eBook sales got a boost, possibly from Apple iPad sales, outpacing hardcover books during the previous quarter, Amazon (AMZN) failed to meet market Wall Street’s expectations. The online retailer’s shares plummeted as much as 13 percent in pre-market trade this morning, as a result. Amazon said it earned $207 million, or 45 cents a share, for the period ended June 30, which is up by $65 million for the same period last year. Revenue grew 41 percent, but analysts were looking for 12 percent more than that, according to FactSet Research.

MICROSOFT: Software giant Microsoft (MSFT) reported profits of $4.52 billion, which is ahead of Wall Street estimates and up 22 percent year over year, proving that they’re not quite toast. That puts the company ahead of Apple in profit, for now. The company also sold 175 million Windows 7 licenses, and Bing has gained in search market share for the 13th straight month.

APPLE: Apple (AAPL) reported record revenue this week, thanks to iPad (3.27 million sold) and Mac (3.47 million sold) business, and despite iPhone 4 (1.7 million sold) antenna problems. Sales beat analyst estimates by 11 percent, and were up 61 percent year-over-year. Net profit hit $3.25 billion, but since the iPhone’s woes only started around the close of the quarter it will be another quarter before any impact is felt.

AT&T: AT&T (T) may also feel the iPhone 4 pinch next quarter, but for now, it’s reporting a 26 percent increase in earnings with $4.02 billion in profit, thanks to a recent investment involving Telemex Internacional, as well as lower costs and fewer defections. However, the rate of growth in new contract customers slowed, with the carrier adding only 496,000 postpaid subscribers, which is little more than a third of the number of customers it signed up during the same period last year. The 3.2 million iPhones activated during Q2 is good, but fewer are from new customers than in years past.

VERIZON: AT&T’s lead rival, Verizon Communications Inc. (VZ), may not be making record profits, but it did beat analysts’ estimates, largely due to the Droid, Droid X, and Droid Incredible that brought in 665,000 new customers. The carrier’s profit fell to 58 cents a share from 63 cents a year earlier, but better than the 56-cents predicted by Bloomberg. Average revenue per user grew almost a percent last quarter, with monthly data plan sales increasing 19 percent per customer. As a result of the report, Verizon shares rose as much as 4.1 percent, to $28.10, in pre-trading this morning.

NOKIA: The world’s largest mobile phone maker, Nokia, did not fare as well as some of its competition, reporting a 40 percent fall in second quarter net profit. Despite warnings in June that profits would be down, the Finnish company struggled to compete with such rivals as Apple and Google Android phones, and the stumble is rumored to be costing CEO Olli-Pekka Kallasvuo his job.

QUALCOMM: Shares of chip-maker Qualcomm (QCOM) rose sharply yesterday after the company reported record sales in mobile chips and a 4-percent gain in profit, up to $767 million from $737 million during fiscal 2009. However, quarterly revenue came in at $2.71 billion, down from the prior year’s $2.75 billion.

YAHOO: Search behemoth Yahoo Inc. saw shares fall more than 8 percent on Wednesday after reporting second-quarter sales were short of Wall Street forecasts. The recorded profit for the quarter was $213.3 million, or 15 cents a share. Analysts at FactSet Research had forecast Yahoo to earn 15 cents a share, but on $1.16 billion in sales. Yahoo said display advertising sales rose 19 percent from last year, but search-advertising revenue declined by 8 percent.